Families and businesses across New Zealand are set to benefit from the recent drop in the official cash rate, with Finance Minister Nicola Willis emphasising the positive financial impact on Kiwi households.

The 50 basis point reduction, announced as the third drop since August, brings the total decrease to 125 basis points over recent months.

“This is good news for families and businesses, both directly and indirectly,” said Willis.

“For example, a family with a $500,000 mortgage on a 25-year term could expect to be about $180 better off each fortnight if their rate drops from 7 to 5.75 per cent. The exact impact will depend on factors such as mortgage size, whether the rate is fixed or floating, and the current rate.”

The drop in the cash rate is part of a broader package of measures aimed at easing the financial burden on New Zealanders.

Tax relief, which took effect on 31 July, and the FamilyBoost childcare payments are already providing financial relief for many households.

“The reduction in rates means that many everyday Kiwis can focus more on what matters most to them, rather than worrying about mortgage repayments or whether their card will be declined at the supermarket,” said Willis.

For businesses, lower borrowing costs mean more money circulating in the economy, supporting growth and investment opportunities.

Willis also highlighted the government’s ongoing efforts to prioritise spending, invest in essential services, and reduce red tape, all of which are helping to restore confidence in the economy.

Despite ongoing challenges, Willis remains optimistic about New Zealand’s financial recovery.

“While there is still a long road ahead, we are headed in the right direction,” she concluded.

With the recent reduction in the cash rate, many Kiwi families and businesses are poised to see the benefits in the weeks and months to come.